The private company responsible for vetting Edward Snowden for a security clearance is under criminal investigation for systemic failure to adequately conduct background checks.

Sen. Claire McCaskill, D-Mo., announced at a Senate hearing Thursday that USIS, a government contractor headquartered in Falls Church, Va., conducted a background check for Snowden in 2011. The 29-year-old systems administrator’s clearance gave him access to classified documents he later leaked to the media, revealing secret surveillance by the National Security Agency.

“We are limited in what we can say about this investigation because it is an ongoing criminal matter, but it is a reminder that background investigations can have real consequences for our national security,” McCaskill said. “Federal agencies, like the Defense Department, rely on these background investigations to make assessments of whether people should be trusted with our nation’s most sensitive information. . . . It appears that this trust has been broken.”

USIS is the largest commercial provider of background investigations to the federal government. The company said in a statement that USIS has never been informed that it is under criminal investigation, although it did receive a subpoena for records from the inspector general of the Office of Personnel Management in January 2012. “USIS complied with that subpoena and has cooperated fully with the government’s civil investigative efforts,” the statement said.

The company declined to comment on whether it had conducted a background check on Snowden.

Inspector General Patrick McFarland confirmed during the hearing of a Senate Homeland Security subcommittee that an investigation is underway, and added that “we believe there may be some problems” with Snowden’s background check. McFarland declined to comment further, citing the ongoing probe.

About 75 percent of all background investigations on behalf of the federal government are conducted by contractors, and USIS performs 65 percent of those investigations, McCaskill said. The Office of Personnel Management paid the company more than $200 million last year for its work, she said.

McCaskill and other lawmakers at the hearing grilled federal officials about how the government screens employees and contractors who have access to some of the country’s most sensitive information.

“How in the world does a contractor – a contractor who had been on the job for three months – get his hands on information detailing a highly classified government program that he subsequently shares with a foreign media outlet?” asked Sen. Jon Tester, D-Mont. “The long answer is one that will ultimately require a great deal of soul-searching by the folks in this room and throughout our government. But the short answer is that, in terms of securing classified information, we don’t just have an external problem, we have an internal problem.”

Nearly 5 million people have been granted security clearances by the U.S government, and 1.4 million have top-secret clearances, Tester said.

“Given the increasing amount of classified information produced and maintained by our government, and the increasing number of folks with access to that information, we have a real problem on our hands if we can’t get this right,” he said. “And because of the national security implications involved, there is simply no margin for error. None.”

McFarland, the inspector general, said he has been alarmed for years about the lack of oversight of the Office of Personnel Management’s Federal Investigative Services program, which uses both contractors and federal workers to conduct 90 percent of all background checks for the U.S. government. He requested more funding so that his investigators can perform regular audits.

McFarland testified that since 2007, at least 18 investigators have been convicted of fabricating background checks, casting doubt on hundreds of security clearances.

In those cases, the background investigators reported interviews that never occurred, recorded answers to questions that were never asked, and documented records checks that were never conducted, he said.

One contractor faked 1,600 credit checks. As it turned out, her own background investigation had been faked by a background investigator in a separate case.

McCaskill asked McFarland if he believed that his office was catching most of the fraud.

“I believe there may be considerably more,” he said. “We haven’t caught them all.”

Tester said he was alarmed to learn that there apparently are no government-wide standards for how to conduct background investigations.

“Sir, there are standards,” said Merton Miller, associate director of investigations for the Federal Investigative Services.

“But they vary between each agency,” Tester said. “The standards could go from soup to nuts.”

Miller told the senator that officials are working to align standards and provide consistency across federal agencies.

“Have we been successful in that, in developing measurable standards?” Tester pressed.

“Sir, we’re better than we’ve been,” Miller replied. “There’s still more to do.”